A Comprehensive study of wine distribution channels in Delhi Assignments

A Comprehensive study of wine distribution channels in Delhi Assignments

1. Introduction

Over the past few years, the demand of wine in the Indian market has increased with a smooth pace and now the consumers in the industry are focusing on trying and tasting different varieties of wine available in the country. It can be expressed that rose, sparkling and white are some common varieties of wine which are highly consumed in the Indian market. Traditionally red wine was the most common category of wine which was consumed by India but with the passage of time, the demand of other varieties of wine has also increased to a great extent (Mehta and Bhanja, 2018). 

Considering the case of the Indian market, it can be expressed that increasing awareness of wine as a drink which enhances health and wellbeing is the most critical factor which has resulted in increasing the overall consumption of wine among masses. Nowadays, Indian consumers prefer wine as a drink which has wide ranges of positive health-related benefits if consumed in an appropriate manner or level. Over the past few years, a 25% annual growth rate has been witnessed by the wine industry and the growth rate can be termed as satisfactory to a great extent. Apart from this, the increasing popularity of Vineyards as a place for tourism and growing disposable income of people in the country are some other factors responsible for the growth of the wine industry in India. 

On the other side of this, it can be argued that in a country with a population of more than billion, there are only a few million consumers of wine. It means that strong and aggressive marketing is still required to make wine popular in the Indian market.  

In terms of average cost, it can be asserted that a bottle of 750 ml of wine cost between 1500 to 2500 INR depending upon the brand name and ingredients. Furthermore, Sula Rasa is the wine which is most commonly consumed in the Indian market and it is a domestic brand manufactured in the region of Nashik Valley India. In terms of consumer profit, wine in Indian is mostly consumed by people living in urban areas and the one who falls under the middle and higher income level of the societies. 

Furthermore, upper middle-class urban consumers are the most important target market of the wine companies in the country. The consumption of wine among both male and female is increasing in their category (Insight – India’s growing thirst for wine, 2019). Majority of the wine sales in the country accounts to red wine and white wine and by the end of 2020, it is expected that the overall consumption of wine in the Indian market will reach 8 million. The city areas of Dehli and Mumbai are the one which is the largest consumers and dominating markets for wine. 

2. Size of Delhi in terms of the wine industry

Dehli is the capital of India and it can be expressed that Delhi is the second largest consumer of wine in the country. The overall wine sale within the capital is growing with a very good pace and the state has witnessed 41% growth in wine sales from the year 2010 to 2011. In India, Mumbai is the state which is the highest consumer of wine whereas the rate of wine consumption is higher in Delhi in terms of consumption of international wines. The people living in Dehli are more interested in consuming the international brands and flavours of wine as compared with the domestic wines (Saranraj et al. 2017). 

Dehli also has higher prosperity level in terms of spending on wines in comparison with other states and cities of the country. The selected marker i.e. Delhi is also considered as the huge market which can provide ample opportunities for growth and development to the wine industry. The young population in Dehli is increasing at a rapid pace and this fact also indicates that there are adequate growth and development opportunities present in Dehli. The statement can be justified by the fact that young people in the country are the biggest consumer of wine and thus, the growing and increasing young population in Dehli can be termed as a potential growth opportunity. 

In comparison with other alcohol categories such as Whisky and Rum, the consumption of wine is considered as more stylish and sophisticated and this can be termed as another major reason because of which the preferences and consumption of wine in Dehli is increasing with a very good pace (Gawande et al. 2017). Considering the case of Dehli, wines are now even making their way to parties, different events, family functions and marriages. The women in Dehli are also a major segment which is directed towards the purchase of wine. Most of the women are buying categories of wine with an objective to gift the same to other women or individuals and this is further enhancing the sales of wine in Dehli.

It has also been identified that Dehli is holding 10.2% of the total market share of the wine consumptions in the country. The increasing upper middle class and urban population in the state is also a major reason because of which Dehli is considered as one of the most potential markets for the wine industry. Dehli is also treated as the second most happening and potential place for the wine market or industry and this is because of the increasing demand for wine in the state. 

It has been identified that over the past few years, Dehli has witnessed a drastic change in areas such as consumer lifestyle choices and demand for different varieties of alcohol. Furthermore, wine is now becoming one of the most favourite and most preferred alcoholic drinks in pubs and restaurants of the state (McIntyre et al. 2016). The market of wine in Dehli is expanding with a very good pace and there are wide ranges of factors responsible for the same. For example, special occasions such as Vinitaly India 2007 are responsible for making wine as a drink more and more popular within Dehli. The retail sales in the state have certain restrictions and therefore, most of the wine sales in Dehli are coming from the hotels and embassies. The Bars, clubs and hotels in the state have been provided with a license to serve or sell wine to the customers. 

On the other side of this, it can be argued that because of the restriction of carrying out marketing and promotion of alcoholic drinks to mass media in the state, the seller of wine is now available with limited tools and techniques of promotion (Jones and Grandjean, 2017). Furthermore, on premises marketing and in shop advertisements are the most common form of promotion which are allowed and which are used by sellers of wine in Dehli. The sellers are also required to obtain different license to sell wines and some common licenses are retail vend, hotel room service, hotel bar etc.     

3. Wine in general 

Dehli is importing wines from different domestic and international players with an objective to satisfy the need and demand of people in the market. Furthermore, Maharashtra, Andhra Pradesh, Karnataka and Himachal Pradesh are some states which are indulged into the manufacturing of wine and supplying the same to Dehli. Furthermore, Grover Vineyards, Heritage Grape Winery, Hampi Heritage Winery, Pampasar Distillery Ltd and Le Meridien distillery are some major wineries which are supplying wine into Dehli (Wine companies in India, 2019). Apart from this, Munjral Brothers, Dhall Group, Hema Connoisseur Collection, Brindco Sales Limited etc. are some other players which are supplying different varieties of international wine in Dehli (Wine Importers in India, 2019). 

Consumer preferences and expectations also play a vital role in the success and growth of entire industry and this is one of the most important reasons because of which businesses are encouraged to take care of consumer need and preferences in the best possible manner. It has been identified that at present the awareness of consumers in Dehli is limited in the context of wine and at the same time, factors such as consumption of wine and awareness of the same are directly linked with each other (Durand and Khaire, 2017). Increasing awareness of wine is directly resulting in increasing the level of wine consumption in the state. 

On the other side of this, the consumer behaviour in the state is also directed toward consumption of wine because it provides wide ranges of health-related benefits. Red wine is still the most consumed variety of wine among people in Dehli and the reason behind this is that preferred taste of red wine. In addition to this, it has also been identified that at present the wine market of Dehli is dominated by international wines (Krishnamurthy et al. 2016). Here, most of the international wines consumed in the state are imported from the market such as Germany. 

A small percentage of wine consumers in Dehli prefer domestic wine over international wines because the domestic wines are easily and widely available at low prices. It has also been identified that most of the consumers in Dehli are not even aware of the basic origin of the wine which they prefer to drink.

In terms of consumer preferences, people in Dehli usually prefer to drink one to two glasses of wine every day because if the health-related benefits associated with the same. Individuals in the state also prefer to consume wine on special occasions or festival with a purpose of celebration (India Wine Insider, 2017). 

4. Market size and buyer behaviour

The size of the wine market in Dehli can be termed as very large and potential because the numbers of wine consumers are increasing in the state with a very good pace. However, more than 90% of the overall wine market in the state has been dominated by domestic players in the country. Apart from this, France, Italy and Germany the major international suppliers of wine in the Dehli and the demand for international wines are also increasing among the consumers (Joshi et al. 2017). The market is very potential because at present there are few domestic and international players operating in the market and the overall degree of competition is also moderate. From the past many years, whiskey and Rum have dominated the domestic alcohol market of Dehli but now wine is giving intense competition to these products. 

Here, red and white wines are the most famous categories of wine which are consumed by people in Dehli. It can be asserted that people in the upper middle and upper-income level of societies are the ones who prefers to buy and consume wine. However, it can be argued that in the present scenario, the consumption of wine has not remained restricted to one particular market segment and wines are now preferred by diverse market segments. For example, women in Dehli are purchasing and consuming wines more in comparison with the males (Gouveia et al. 2018).  Youngsters in the state are also a major market segment which is contributing to the growth and increasing sales of wines. People are also purchasing wine in the state to impress others and show their status as wine nowadays is considered as a symbol of style and class. 

According to the current trend in Dehli, expensive varieties of wines are now poured during the business meetings and different types of get together parties just to impress others (Jones and Grandjean, 2017). People with monthly income of more than 30,000 INR are also able to afford the local varieties of wine and this is also a major factor which is contributing a lot in the increasing consumption of wines in the state. 

 Price of wine is considered as the main and most important factor which is affecting the behaviour or buying decision of wine consumer in Dehli. Most of the buyers in the state are making a decision of purchase based on the price of wine and therefore, the price is the biggest factor influencing the buyer decision in comparison with other factors such as quality, brand and ingredients. 

The consumption of wine in Dehli is also increasing within the households and it can be expressed that wine is now getting cultural acceptance in most of the part of the state. Wine drinking has become a day to day trend in many homes within Dehli and cultural acceptance has been provided to wines because of the health-related benefits associated with the same (Mehta and Bhanja, 2018). After carrying of the study of consumer behaviour in Dehli in the context of wine, it has also been identified that gifting of wine is also becoming a more and more popular trend with the passage of time. 

5. Promotion of wine 

The promotion has emerged as the biggest and most critical challenge for the entire wine industry or market of Dehli. The statement can be justified by the fact that alcohol advertisements have been banned by the government not only in Dehli but in the entire country. The international and domestic producers and suppliers of wines are now available with limited options and techniques to carry out marketing and promotion of different wines and related products. The local and international companies are struggling a lot in terms of promoting wines and this can be termed as the biggest challenge in the entire market. 

On-premises marketing and in shop advertisements are the two easy and most common forms or techniques of promotion which are taken into consideration by the wine businesses to promote their products and services (McIntyre et al. 2016). The restaurants and hotel, bars and clubs are provided with an opportunity to advertise new flavours and varieties of wines within their premises. On the other side of this, the wine shops are carrying out advertisement and promotion of different wines by displaying ads within the shops. 

The awareness can be created only among the walking customers and at present, no promotion tool is available for the wine businesses which can support in creating awareness and promoting wines among the mass audience in Delhi (Saranraj et al. 2017). It has also been identified that word of mouth is another major tool of promotion which is supporting the growth and development of wine in the state. The new flavours and varieties of wines are promoted by individuals through word of mouth and this is further resulting in increasing the sale of wine in Dehli. 

Businesses are emphasizing a lot on techniques such as word of mouth because there are limited options and alternatives of promotion available. People in Dehli are also purchasing and consuming different varieties of wines based on the suggestions and recommendations provided by their friends, family members and colleagues. Sula Wine is very popular among the people in Dehli and word of mouth can be termed as the biggest factor responsible for the popularity of Sula in the State. 

Most of the people even today suggest Sula as the best wine to drink in Dehli. On the other hand, Doctors have also emerged as a medium through which the promotion of wines in Dehli is now carried out. Nowadays, many doctors are recommending their patients to drink wine in a limited amount on a daily basis to remain healthy. The wine companies are approaching doctors to promote their products as a healthy drink for well being.  

6. Distribution channels for wine 

Distribution channel in the wine sector is a complex process, it is mainly focused on the concept of indirect distribution. In this, the company focuses on the selling through intermediaries so that corrective measures can be taken into account. Marketing channel of indirect selling is considered as a channel that allows having optimum utilization of the product and resources. In this, indirect process the producer contact to agent and distributor so that movement of the product can be taken into account (Taylor and Taylor, 2017). After this, the goods are being sold to retailers and then to customers. In addition to this, it can be said that the chain of intermediaries allows moving the products in an accurate manner. The consumer can easily access to the wine products in an accurate manner. The indirect channel of distribution involves the product passing with reference to the additional steps. It allows having produced goods movement via distributors to the retailers. 

Indirect channel adopted by the wine sector is reliable on the intermediaries. The performance of indirect channels impacts the operations of the wine sector in a diverse manner. It is also known as a wholesale distribution channel. The most challenging part of indirect distribution channels is that another party has to be entrusted with the manufacturer’s products and customer interaction. It has also been witnessed that the indirect channels also considered a simple way to move the products in the market. It allows increasing the cost to the consumer and slowing down the delivery (Taylor and Taylor, 2017). Third party involvement is being promoted in the distribution channel and it allows accomplishing the objectives inadequate manner. The indirect channel of distribution also enhances the focus on the core business and distribution aspects can be outsourced in an accurate manner. 

Another benefit of the indirect distribution is to have easy reach to the customers and allow saving the cost of infrastructure for a manufacturing firm. It also improves the sales force values in an accurate manner and assists in meeting standards. The distribution channel adopted by sector is also considered as three-tier system so that better movement of wine product can be taken into account. It allows passing through middle man and ensuring the sustainable values (Ray and Chowdhury, 2015). It also indicates that the product does not sell directly to the bars, liquor stores, or grocery stores. It is a distribution channel that works on the basis of relation relationship. Distributors in the sector are also used to maintain the refrigerated warehouses so that product can be stored properly. Due to middle man practice, the system allows having increased in the prices of wine. The higher prices are force society to not invest more on the consumption of wine. 

However, it has been witnessed that the system is not having efficient working because of the middle man. Many of winners are contesting in the system that also impacts the overall operations in a negative manner. The distribution system in the Delhi is highly complex because our state measures are needed to be followed properly. Any kind of violation regarding commerce clause is also needed to be followed properly to accomplish the objectives. 

7. Market research 

In addition to this, it can be said that importers and exports are also key aspects that need to be understood by businesses. Companies in Delhi are having an import of wine from different foreign nations. It has been witnessed that the majority of wine products are being imported by companies in Delhi. Classification of key importers can be as Munjral Brothers (Distribution) Pvt. Ltd, Dhall Group, Hema Connoisseur Collections (P) Limited, Brindco Sales Limited and United Spirits Limited. These are the key players that import the wine from other nations so that the same can be served in Delhi. Top wine importers in the sector are from the developed nations (Bargain et al.  2018). Classification of key nations can be as United States, United Kingdom, Germany, China, Japan, etc. Highest importer of the wine products in Delhi is from the United States. It allows accomplishing the standards in an accurate manner and leading business to better success. 

However, the export in Delhi is nothing because there are no production plants in the Delhi state. All the wine yards are being set up by companies in Maharashtra and Bangalore. It indicates that 0 % of export is being recorded from Delhi. It is also a key reason that the pricing of wine products in Delhi are high that affects the overall growth of the sector. Infrastructure is not proper in terms of wine production that also enhances the ratio of wine import in Delhi. 70 per cent of the wine in Delhi is being imported from other nations that are also indicates that infrastructure development must be referred properly (Carroquino et al. 2018). It has been noticed that Delhi wine sector is having great opportunities in the competitive values. It allows accomplishing the objectives in the desired manner. It is also because of the high rate of import values. 

8. Major players in the market 

A number of players are having participation in the sector and offers a wide range of services to the customers. Key players in the wine sector are Chateau Indage, Four Seasons, Charosa and Fratelli. These all players are having effective participation in the sector that also enhances the competitiveness. It has been witnessed that a high scale of competition creates an issue for the businesses. La Reserve, Grover, Sula, Heritage Port, Vinsura Wines, Nine Hills, Chateau d’Ori are also key competitors in the sector. It allows having better competition in the market. Each firm is trying to improve its distribution channels so that overall objective can be accomplished (Robinson and Harding, 2015). 

In addition to this, it can be said that Chateau Indage is having key practice from different locations. Different plants are being installed at the different locations of Narayangaon, Pune on the Pune-Nashik Highway. It indicates that the companies are sales under state laws so that better opportunities can be attained in the market. It has been witnessed that Grover Vineyards is located near to Bangalore, Karnataka and it is being sold in Delhi through the indirect channel. It allows having better reach to the customers. Key players of the industry are also focusing on improvement in quality and taste to attract more customers. It assists in meeting the objectives and lead the business firm to an impressive level of success (Carroquino et al. 2018).

Key wine suppliers in the sector are Eshik Impex, Technometrics Farma, SK Impex and Elite Vintage Winery India Private Limited. The high scale of competition in the market allows improving the standards inadequate manner. It assists in meeting the objectives properly. Pricing factor is also being considered by businesses to have a better application of standards. It is necessary to have long term development and allows meeting the objectives inadequate manner. It has been witnessed that Sula Vineyards is a company that produces 300,000 cases in a year to gain competitiveness in the market. It is also expected to increase by the end of the year 2019 so that long term development can be taken into account. 

9. Analysis of the wine industry in Delhi 

It has been noticed that Delhi wine sector is having great opportunities in the competitive values. It allows accomplishing the objectives in the desired manner. It is also a reason that the world-class wine is being served in the Delhi bars and retail stores. Companies are having continuous improvement in the product line so that long term development can be promoted. Growth numbers are also impressive that attract the working in the desired manner. A better understanding of the market can be taken into account as per swot standards (Bargain et al.  2018). 

A key strength of the wine industry is that companies are having continuous growth with a rate of 7 per cent per annum. The standards are being evaluated in an accurate manner and in the last five years, the businesses are having impressive growth. It has also been identified that Delhi wine sector is having an improvement in terms of grape growth. Urban population in Delhi is also increasing day by day that assists in meeting standards. It also helps the sector to have advancement in sales. It allows improving the work conditions in an accurate manner and leading to an impressive level of success. Along with this, changes in consumer needs are also benefiting the business firm. Young people are attracted to wine products as an alternative to hard drinks. Wine consumption allows people to have a refined taste of liquor. It also enhances customer satisfaction and improves work consideration inadequate manner. Wine product is also becoming a most acceptable product among women and youth of Delhi that enhances the opportunities for the industry (Ray and Chowdhury, 2015). 

Other than this, an issue that the sector is facing in Delhi is regarding the lack of cellars and refrigerators. It affects the inventory management and impacts the overall performance. Along with this, many distributors are serving alcohol to the population that is not legally allowed to consume the product. Poor awareness about the wine infrastructure and products is also a critical issue that affects the overall development.  

10. References  

  • Ray, P. and Chowdhury, S., 2015. Popularizing Grape Cultivation and Wine Production in India–Challenges and Opportunities. International Journal of Social Sciences4(1), pp.9-28.
  • Robinson, J. and Harding, J. eds., 2015. The Oxford companion to wine. American Chemical Society.
  • Krishnamurthy, R., Mishra, R. and Desouza, K.C., 2016. City profile: Pune, India. Cities53, pp.98-109.
  • McIntyre, E., Ovington, L.A., Saliba, A.J. and Moran, C.C., 2016. Qualitative study of alcohol consumers who choose to avoid wine. Australian journal of grape and wine research22(2), pp.182-189.
  • Durand, R. and Khaire, M., 2017. Where do market categories come from and how? Distinguishing category creation from category emergence. Journal of Management43(1), pp.87-110.
  • Gawande, S., Shukla, P. and Mishra, A., 2017. Study on Wine Policies, Regulations and Standards in Maharashtra, India. Science, Technology & Public Policy1(1), p.6.
  • India Wine Insider, 2017. [Online]. Available through: < https://www.indianwineacademy.com/Presentation_Final_100317.pdf >. [Accessed on 23th March 2019].  
  • Jones, G.G. and Grandjean, E., 2017. Creating the market for organic wine: sulfites, certification, and green values. Harvard Business School General Management Unit Working Paper, (18-048).
  • Joshi, V.K., Panesar, P.S., Rana, V.S. and Kaur, S., 2017. Science and Technology of Fruit Wines: An Overview. In Science and Technology of Fruit Wine Production (pp. 1-72). Academic Press.
  • Saranraj, P., Sivasakthivelan, P. and Naveen, M., 2017. Fermentation of fruit wine and its quality analysis: a review. Aust J Sci Technol1(2), pp.85-97.
  • Taylor, S. and Taylor, M., 2017. The Aroma of Opportunity: The Potential of Wine Geographical Indications in the Australia-India Comprehensive Economic Cooperation Agreement. In The Importance of Place: Geographical Indications as a Tool for Local and Regional Development (pp. 81-107). Springer, Cham.
  • Bargain, O., Cardebat, J.M., Chiappini, R. and Laffitte, C., 2018. Long-Term Prospects of the International Wine Trade. Journal of Wine Economics13(4), pp.442-450.
  • Carroquino, J., Roda, V., Mustata, R., Yago, J., Valiño, L., Lozano, A. and Barreras, F., 2018. Combined production of electricity and hydrogen from solar energy and its use in the wine sector. Renewable energy122, pp.251-263.
  • Gouveia, S., Rebelo, J. and Lourenço-Gomes, L., 2018. Port wine exports: a gravity model approach. International Journal of Wine Business Research30(2), pp.218-242.
  • Mehta, R. and Bhanja, N., 2018. Consumer preferences for wine attributes in an emerging market. International journal of retail & distribution management46(1), pp.34-48.
  • Insight – India’s growing thirst for wine, 2019. [Online]. Available through: < https://www.austrade.gov.au/news/insights/insight-indias-growing-thirst-for-wine >. [Accessed on 23th March 2019].  
  • Wine companies in India, 2019. [Online]. Available through: < https://business.mapsofindia.com/india-company/wine-companies.html >. [Accessed on 23th March 2019].  
  • Wine Importers in India, 2019. [Online]. Available through: < https://beveragetradenetwork.com/en/list-of-wine-importers-in-india-275.htm >. [Accessed on 23th March 2019].